Fadak.ir - Possibilities and directions of application of intellectual technologies in strategic management

Decision making, strategic planning, strategy implementation, environmental factors Intelligent decision support system

An intelligent decision support system (IDSS) is a decision support system that makes extensive use of artificial intelligence (AI) techniques. Use of AI techniques in management information systems has a long history – indeed terms such as "Knowledge-based systems" (KBS) and "intelligent systems" have been used since the early 1980s to describe components of management systems, but the term "Intelligent decision support system" is thought to originate with Clyde Holsapple and Andrew Whinston^[1]^[2] in the late 1970s. Examples of specialized intelligent decision support systems include Flexible manufacturing systems (FMS),^[3] intelligent marketing decision support systems^[4] and medical diagnosis systems.^[5]

Ideally, an intelligent decision support system should behave like a human consultant: supporting decision makers by gathering and analysing evidence, identifying and diagnosing problems, proposing possible courses of action and evaluating such proposed actions. The aim of the AI techniques embedded in an intelligent decision support system is to enable these tasks to be performed by a computer, while emulating human capabilities as closely as possible.

Many IDSS implementations are based on expert systems,^[6] a well established type of KBS that encode knowledge and emulate the cognitive behaviours of human experts using predicate logic rules, and have been shown to perform better than the original human experts in some circumstances.^[7]^[8] Expert systems emerged as practical applications in the 1980s^[9] based on research in artificial intelligence performed during the late 1960s and early 1970s.^[10] They typically combine knowledge of a particular application domain with an inference capability to enable the system to propose decisions or diagnoses. Accuracy and consistency can be comparable to (or even exceed) that of human experts when the decision parameters are well known (e.g. if a common disease is being diagnosed), but performance can be poor when novel or uncertain circumstances arise.

Research in AI focused on enabling systems to respond to novelty and uncertainty in more flexible ways is starting to be used in IDSS. For example, intelligent agents^[11]^[12] that perform complex cognitive tasks without any need for human intervention have been used in a range of decision support applications.^[13] Capabilities of these intelligent agents include knowledge sharing, machine learning, data mining, and automated inference. A range of AI techniques such as case based reasoning, rough sets^[14] and fuzzy logic have also been used to enable decision support systems to perform better in uncertain conditions.

Introduction

There are a number of arguments concerning the role of information technology in the strategic management process for business organization. Nonetheless, this paper tries to provide the importance of information technology on strategy management process. Accordingly, the first part of the paper provides a brief discussions on key terminologies used in Information Technology(IT) in line with clarification about Information Technology. Words like Information Technology, Information system, and Management information system clarity for the purpose of contextual meaning in subsequent discussions. In this part emphasis is given for the benefits of information technology for strategy management process.

The Second part of the paper tries to explain about strategy and strategic management, organizational understanding and types of strategic leaders in the organization.

The final part of the paper provides a detail discussion on the role of information technology in the strategic management process focusing on basic understanding on Information technology and its integration with the strategic management. This part of the paper presents conclusions illustrated in the main text body.

Here in after, the term Information Technology is used to describe the usage of a wide variety of items and abilities used in the creation, storage and dispersal of information. Information technology focuses on processing of information which is the basic part of strategic management process, called Strategic analysis.

In this regard, Information technology is used to as an essential input to the process of strategic decisions. The following paragraphs are devoted to provide some benefits in using information systems.

The word Information System in this context describes a usage of a computer system to process data and produce business information. For processing of data Hardware, software, peoples, procedures are considered.i.e.they constitute information system.Here, Hardware is referred as part of a computer system that can be touched and seen by our sense organs. Keyboard, Mouse, Monitor, printer etc are grouped under Hardware. However, Software is part of a computer system that cannot be touched with our necked eyes. This include operating system software, and the applications software, hence, computer becomes nothing by itself without software.

Using information systems import a number of impacts on an organization success. These impacts can benefit the organization, users of the information system, and any individual or group who will interact with the information system.

Some of the specific benefits are ,adding value to products (goods and services),better safety ,better service ,competitive advantage ,fewer errors ,greater accuracy ,higher quality products ,improve communications ,increase efficiency ,increase productivity ,more efficient administration ,more opportunities ,reduce labor required ,reduce costs ,helps in decision making ,superior control over operations etc.

All the above benefits come from the capability of the computer system in relation to speed, consistency, precision and reliability. Here after, some of the benefits are illustrated.

In relation to time related benefits, classical idiom appears to be relevant, "time is money". This is to mean that every minute of second has value for a person who utilizes the time effectively.

Accordingly, business organization has to treat their customers by providing appropriate services accurately and timely. However, Most of the time, we could not achieve or delay in delivering information, service, and products on time due to limited usage of information technology. But, with the help of information technology more work can be done timely by individuals, businesses, services and government organizations with high speed and accuracy. Hence, computer systems can process and helps to convert a bulk of data to meaningful information within a fraction of seconds; faster than people. These results in minimization of information gap among organizational units and enhance business efficiency.

The other use of Information technology is consistency. It is one of the qualities of computer system to retrieve repeated actions every time precisely.

In addition to the benefits stated under speed and consistency, Information technology also provide a benefit of precision.

Furthermore, due to speed, consistency and precision the computer system provides reliability. It is to mean that information technology gives the same result again and again unless and otherwise the input raw data is changed.

Therefore, emphasis has to be given for the Management information systems outputs as it is always based on the input we provide and the instructions. (That is, the internal programming codes initiated by our input).

Recognizing the above described benefits currently, most business organizations are using information technology by allocating huge investment so as to equip the management information system for the attainment of the business objectives. On the other hand, as capital investment on information and communication technology within business organization continues to increase, it is also necessary to optimize the benefits from such investment. That is to say, there is an expectation that business organizations not only maximize the benefits of adopting information and communication technology but also expected to minimize possible drawbacks and risks that are associated with rapid technological change and offer competitive advantage.

Generally, information technology system helps in effective utilization of resources. Like efficient utilization of manpower in the business not only to concentrate on routine manual works but to go beyond and spend time on "what-if analysis scenarios".

Information Technology and Strategy

Some managers did not give more attention about the benefits of information systems on the business strategy process. Such luck of attention is related to a number of factors. First, there appears to be some gaps as how information technology could be used in their Strategic management process.

Second, there was a great misunderstanding on the usefulness of the information technology on business strategy. But nowadays, most of the business entities understood the benefits of the information technology systems as an enabler of their strategic management system process.

Besides, there is more awareness where and when to implement it and use information technology in the process of crafting different strategies that lead them to the road of stakeholders satisfaction.

Some of the application areas like transaction processing systems and decision support systems (DSS) have been used as the main information system so as to enhance business performances.

In addition to the above advantages large computer network that shares different information with reliable and easy internet systems has been used by the organization for the purpose of communication, distribution of information, to offer goods and services online to customer, to interact with other business organization either for business transaction or information exchanges etc.

Such internet usage leads to live in a global village in which computers and peoples are linked within companies, countries, and continents resulting easy communications in reducing the time and geographical barriers.

In this regard Mr. Kodama, (2002) asserts the importance of Information Technology in this competitive business world as crucial for business sector to consider and emphasis on the significance and role of information and communication technology for setting up competitive businesses, managing global corporations, adding business value, and providing valued products and/or services to their potential markets.

The main points on the above statement intended to address the capability of information technology to transform corporate data into meaningful and actionable information that helps the strategic management process of a business.

Gerald V.(1999) , also confirm that, information technology systems enable workers to process more items, and allowing the firm to expand without increasing labor costs beyond the ability of reducing errors in the data which leads to improved decision making. The stated findings also indicate the importance of information technology in business strategy.

Consistent with the above justification, in the developed country, almost all transaction has been undergoing electronically through internet infrastructure called electronic commerce (e-commerce). Such transaction decreases the intermediaries between the business and the end users. It reduces costs like labor, document preparation, telephoning, and mail preparation etc. and IT become part of the daily life activity.

On the other hand, in developing country there are some gaps in using Information technology in their business strategy as well as day to day activity as compared to the developed country. Therefore more efforts are expected in the future to get competitive advantages from application of information technology.

Role Of IT In Strategic management
1. SUBMITTED BY RAMAPRIYA NITHEESH SRIRAM ASHWIN GANESH RAHUL
2. Introduction: It is a branch of engineering dealing with the use ofcomputers and telecommunications equipment tostore, retrieve, transmit and manipulate data. Information Technology is defined as "the study,design, development, application, implementation,support or management of computer-basedinformation systems”.
3. COMPETITIVE ADVANTAGE: Information technology can create competitive advantage foran organization and improve its competitive position in themarket Organizations can achieve sustainable competitive advantageusing information technology in an appropriate way to answerbusiness requirements. Organizations have to know how toapply this technology in their own organizational processes andactivities. This awareness is vital to the organizational success. Evidencesindicate that implementation of successful business strategiesusing information technology has led to the improvement oforganizational efficiency and effectiveness
4. IT has changed the structures and organizationalprocesses. This technology has caused organizations tobecome small, decreased the number of staffs andorganizational level, extended inside and outsideorganizational communication and also decreasedcommunication costs The difference among organizations in profitability andoptimum performance is more due to the difference inmanagerial skills rather than a difference at the level ofinformation technology. Managers, who are able to organize and manage separateactivities better than others by the use of informationtechnology through an appropriate proportion andrelation, will experience a higher level of profitability and amore optimum performance
5.  Market-Based Approach Resource-Based Approach Market-Based Approach In this approach, it is believed that the survival of an organization depends on the market, customers needs and creating value for them. An organization must optimally provide the customers with their needs in appropriate time and place and create sustainable competitive advantage for itself through calculated implementation of the information technology tools. This approach looks at the matters out of the organization
6. Resource-Based Approach In this approach, it is believed that an organizationneeds first to recognize its resources, abilities andskills and then, identify sort of the customers needswhich could be provided efficiently using theseresources and skills One of the most important organizational resourcesand skills is information technology which can be asource of sustainable competitive advantage. Thisapproach tends to direct towards the inner part of theorganization.
7. If an organization can create a value higher than that ofothers for its own stakeholders using informationtechnology, its name and brand will have such a position inthe minds of its stakeholders that is not easy for thecompetitors to achieve. Customers are the most important stakeholders of anyorganization. In case an organization creates a value lowerthan that created by competitors, the contentment of thisimportant group of stakeholders is decreased, andthus, they will go to other providers and competitors toprovide their own needs. Price, quality and services are themost important aspects
8. Price is one of the most influential factors in a customersdecision to choose the product or service of an organization. Anorganization can reduce thedesign, production, sales, distribution and official costs of itsown products and services using information technology. Information technology can reduce costs through theautomation of productive sales and distributional activities andprocesses and pave the way for the implementation of the costleadership strategy. The automatic savings resulted from theseactivities in an electronic environment such as using mechanizedsystems and robots instead of manpower, promotions andmarketing and network sales, the electronic data interchangeand so on, will reduce the costs and makes it possible todetermine the price at the lowest level possible
9. Information technology reduces the need for physical and officialplaces and makes it possible to carry out organizational activitiesremotely. Using Internet, it is possible to establish communicationwith a large number of providers of raw materials and half-madeproducts all over the world, choose the best price offered and then signa contract. Networks also have an important role to play in theoutsourcing of an organization. An organizational activity is said to have been devolved when it cancreate the highest value in the value chain and carry out those activitiesfor which it has sufficient core competency. In consequence, theproducts and services which are offered, are not produced by aparticular organization, but is produced by a collection ofinterconnected organizations. Now, there are more than 2000 companies and 12000 workstations inIntranet of the Hitachi and Ford companies respectively which areconnected to one another. In an intra-organizational network, fast andprecise co-operation is of great import and this cooperation can not beachieved without using the information technology tools.
10. Services include other aspects of value-creation for the customerwhich have not mentioned in the two categories of price and quality.The aspects of value-creation for the customer in the category ofservices are very wide-ranging and different depending on the kind ofproducts or services.After sales services, offering fast and accurate information tocustomers, fast communication with customers, fast delivery of theproducts and services, facility in paying for the products and services,etc. are the most important aspects of the services category. It is possible to serve customers better and more through masscustomization strategy. Mass customization means designing,producing and offering a product or providing a service based on thecustomer’s need
11. Dell Company produces and distributes its products based on this strategy. ITmakes it possible for an organization to have a close relationships withcustomers inside and outside of organization and make mass customization tobe established in an organization. An organization which can offer its services to customers in a way that usingthe minimum physical movement, a customer who can secure his/hermaximum contentment, will be successful in business. If an organization canperform this procedure better than the competitors, it will gain competitiveadvantage in that particular business. Offering services using the information technology tools creates competitiveadvantage through the omission of the place dimension and saving in time.Expressing guarantees, constant communication with the potential and actualcustomers and offering the latest information to them regarding the productsand services via networks, the electronic exchange of documents, paymentsand etc. will be possible at the least time and with the least physical motionusing the information technology tools. The ability of quick and appropriate response to market and customerdemand through using IT tools, caused more customer loyalty andpossibility for repeated purchasing and also increasing customer’stendency to pay more money for the products.
12. According to this approach, an organization is a series ofresources and skills which are used to produce products andservices to be able to compete with competitors in a market.Sustainable competitive advantage in an organization is createdthorough a proportionate and unique combination of theorganizations resources and skills. According to the resource-based approach, organizations mustbuild their strategies in accordance with their resources andskills so that they can be the best in that business and create themost degree of value for customers; a value not to be created byothers. Creation of this kind of value is equal to the sustainablecompetitive advantage based upon the resources and skills.
13. An organizations resources include the physical, humanand organizational capital. In the present era, called "theinformation era", information technology is one of themost important organizational resources. This resourceincludes hardware, software, communication networks andspecialized work force in the field of informationtechnology. Hardware, software and networks are short-living andquickly imitated and patterned. Thus, they cannot createsustainable competitive advantage for an organization.American airlines systems which used informationtechnology in order to achieve differentiation wereimmediately patterned and copied by the competitors
14. The skills and abilities of an organization is the capability of appropriate implementation and combination of organizational resources in a way that leads to the best performance and highest competitive position in the business market for that organization. Skills and abilities put the resources in competitive status and they cannot easily be copied and imitated. In the category of information technology, we face two kinds of work force skills in organizations: Technical Skills Managerial Skills
15. TECHNICAL SKILLS These skills include specialties involved in the creation andimplementation of the information technology tools. In order to makeeffective use of information technology in organizations, it is necessaryto possess these skills; but these skills do not have characteristics of aresource having sustainable competitive advantage, because they areeasily and quickly copied and imitated through individual staff trainingor employing the professional work force. MANAGERIAL SKILLS These skills include the ability to change the organizations businessstrategy into long-run architecture of information, the ability tounderstand and discover new and innovative functions of informationtechnology in business, the ability to combine technical resources andskills and the ability to create synergy in organizational proceduresusing information technology.
16. SAP (Systems, Applications, and Products in DataProcessing) is German multinational corporation thatmakes enterprise software to manage business operationsand customer relations. SAP ERP is thecorporations Enterprise Resource Planning, an integratedsoftware solution that incorporates the key businessfunctions of the organization. The need for ERP arose dueto lack of proper / common database available for all thefunctions in an organization.
17. With SAP ERP, you can efficiently deal with business challenges in thefollowing areas: Financial Areas – Ensure compliance and predictability of businessperformance – so your organization can gain a deeper financial insightacross the enterprise and tighten control of finances. SAP ERP Financialsautomates financial and management accounting and financial supplychain management. Human Resources – Optimize your HR processes with acomplete, integrated, and global human capital management (HCM)solution. SAP ERP provides this HCM solution for organizations of all sizesand in all industries. You can maximize the potential of yourworkforce, while supporting innovation. growth, and flexibility. The SAPERP HRM solution automates talent management, core HR processes, andworkforce deployment , enabling increased efficiency and bettercompliance with changing global and local regulations
18.  Operations – Manage end-to-end procurement and logistics business processes for complete business cycles – from self-service requisitioning to flexible invoicing and payment – optimizing the flow of materials. SAP ERP Operations also helps discrete and process manufacturers manage the entire life cycle of product development and manufacturing. The solution automates the entire manufacturing process and reduces costs by controlling and adapting the manufacturing process in real time and increases customer satisfaction by delivering higher-quality products.
19. With SAP ERP, you can gain the following benefits: Improve alignment of strategies and operations  Run your enterprise in accordance with strategy and plans, accessing the right information in real time to identify concerns early.  Pursue opportunities proactively.  Achieve corporate objectives by aligning workforce and organizational objectives.  Find the best people and leverage their talent in the right job at the right time. Improve productivity and insight  Leverage self-services and analytics across your organization.  Improve operational efficiency and productivity within and beyond your enterprise.
20.  Reduce costs through increased flexibility  Use enterprise services architecture to improve process standardization, efficiency, and adaptability.  Extend transactions, information, and collaboration functions to a broad business community. Reduce risk  Solve complex business challenges today with SAP, your trusted partner for long-term growth, with 30 years of experience working with organizations of all sizes in more countries than any other vendor. Retain top performers  Retain your top performers through clearly defined career and development plans.  Link employees performance to compensation programs such as variable pay plans and long-term incentives.

ABSTRACT

This paper presents findings of a research project which explores the current use of information technology (IT) in the Indonesian construction Industry. The findings are based on a survey taken between December 2002 and April 2003 among 250 construction companies registered in the National Construction Industry Development Board (CIDB). The CIDB listed and classified these companies as B group or large company. A total of 48 valid replies were received, representing a response rate of 38%. The survey includes: IT environment and management, use of software, hardware, internet application and staff competency, Investment in IT, benefits gained and problems associated with IT implementation. An assessment of the exploitation of IT for business strategic purposes was also explored. Survey reveals that (1) Level of IT applications among contractors in the industry is relatively low in their core activity; (2) There is a growing gap in managing IT, where high investment and expenditure in hardware and software on one hand with poor human resources development on other hand; (3) From strategic point of view, Indonesian construction industry is still in reactive mode in managing IT indicating that the industry has a limited understanding of the value and potential of IT. The paper suggests a need to aggressively promote relevant government initiatives which would increase strategic use and adoption of IT. Government and public agencies should consider policies that encourage the use of IT in the construction industry thus making this industry sector more competitive.

INTRODUCTION

The issue of technology exploitation, particularly in the field of information technology, is of significant importance in construction industry. The paper discusses the finding of a survey of 250 construction companies registered in the National Construction Industry Development Board (CIDB). Information technology (IT) has created fundamental impact on the way business processes are carried out. IT can no longer be viewed as an enhancement to traditional business procedures but rather as an innovation agent that enables new and different alternatives in operation of business organization. This new trend will color investment attitudes of business communities in the world towards utilization of IT in the coming years.

IT is already widely used in construction organizations and much more dramatic effects are anticipated for the years to come. [Betts, (1999)] reported that the construction industry in many countries is starting to consider seriously the strategic use of IT. The use of IT in construction is extending beyond the stage of piecemeal application for improving the efficiency of discrete operations by individual organizations to an advanced stage where IT is applied strategically in commercial enterprise, government agencies and professional institution. From strategic point of view, IT has the potential to change the landscape of the construction industry.

INDONESIAN CONSTRUCTION INDUSTRY

The construction industry in Indonesia is relatively young. However, it has grown significantly since the early 1970s. Its contribution to the GDP has increased from 3.86% in 1973 to 7.94% in 1996. It constitutes about 60% of gross fixed capital formation. The number of people employed in the industry has increased significantly, from about 413,000 in 1978 to about 3.796 million in 1996. Construction works in the period of 1996 to 1999 has been sharply reduced due to the recent economic crisis. After 1999, there is slow recovery. In contrast, number of construction companies has increased significantly during the period 1992 – 2002 (CIDB 2003).

Indonesia is an archipelago with more than one thousand islands. More than sixty percent of the construction works are in the island of Java, and more than half of these are in the capital city, Jakarta. Most of project planning and design is prepared in the national capital, Jakarta. Problems arise during construction where buildings or facilities could not be built as planned and designed, or could not be constructed efficiently. Many communication problems develop during the construction stage especially between designers and contractors. Communication in construction has been identified as a problem area [Ganah (2001)]. Information and Communication Technology (ICT) undoubtedly has a profound influence on how data and information is transmitted and used by parties involved in the construction industry. The Latham report has called for 30% cost saving in construction [Hamilton, (1995)]. It said that many ways of achieving this saving will be found through the use of IT.

PREVIOUS WORKS

A number of research surveys concerning IT in the construction Industry have been reported in the literature. Many surveys were carried out in various countries such as: Australia [Love (1996), Stewart (1998), Marosszeky (2000), Thomas Ng. (2001), Canada (Rivard 2000), Hong Kong [Shen (1999), Futcher (2000), Ireland Thomas (1999), Malaysia Mui (2002), New Zealand Dohorty (1997), Saudi Arabia (Sash 1996, O’Brien (1999), Scandinavia: Denmark, Finland, & Sweden (Howard 1998, Samuelson (2002), Singapore BCA (2001), Swee-Lean (2003), South Africa Arif (2003), Taiwan Tang (1996), Turkey Isikdag (2002), UK O’Brien (1994) , Ingirige (2001), and US (CFMA 2002), Toole (2003)]. With so much research being carried out on the use of IT in the construction industry, it is important to ensure that the results and findings can be compared and lessons learned be applied to gain a picture of the growth of IT use.

However, the number of research surveys related to construction IT in developing countries appears to be limited. Above surveys certainly provide information of IT in construction industry in the developed countries. [Howard (2003)] stated that IT products such as software are available worldwide, but may not fit into industries that are organized in a traditional way and do not have the same drive towards process improvement yet. [Stewart (2002)] reported that construction organizations operating in these countries face further distinctive difficulties, such as, scarcity of IT professionals, inadequate physical and information infrastructure, social and cultural diversity, and political barriers that modulate and distort competitive markets

RESEARCH OBJECTIVES AND METHODOLOGY

The research aims to investigate the current state of IT in the construction industry, to obtain an up-to-date and general view of the state of IT applications in Indonesia. The survey includes IT environment, such as hardware, software, networks, staff competency, and IT investment and the resulting benefits and associated problems, and assessment of the exploitation of IT for business strategic purposes.

Postal transmission of questionnaire was selected as the main information gathering research process. This method is widely used for collecting data and opinions from target groups. Some personal interviews have also been undertaken to supplement some limitations of the postal questionnaire. The mailing list for the survey distribution was obtained from the National Construction Industry Development Board (LPJKN/CIDB). The survey recipients were mainly in the capital, Jakarta area for the following reasons: (1) About 30 percent of construction projects in Indonesia are located in the Greater Jakarta area, (2) Most of the projects, especially public work projects, are planned and designed in Jakarta, and (3) Most of the construction participants - owners, designers and contractors - have their head offices or representatives in. There were approximately 247 organization listed in the mailing list representing all national companies which operate throughout Indonesia. A group of 130 randomly selected construction companies were sent the questionnaire. Of these 20 were returned undelivered and or declined to participate. 48 organizations (44 % of those delivered) returned the questionnaire. The questionnaire responses were entered into a spreadsheet for collation and analysis.

Characteristics of Respondents

The companies represented in the survey had a workforce that varied from one employee to over 200 employees in average. Under half of the respondents have over 200 employees.

The respondent companies in terms of size (number of employees) are shown in Table 1. The data is derived from Construction Industry Development Board (CIDB) of Indonesia. Most of the companies are involved in civil, electrical and mechanical construction works. Over 90% of all local companies are involved in civil construction business. Of all international respondent companies 64% have engineering business (Electrical and Mechanical Engineering), and 59% of them compete with the local firms in civil construction

Thirty organizations had annual revenue of more than US$666,667. Twelve (25%) organizations had an annual turnover between US$111,111 – 555,556 and 6 organizations had an annual turnover of less than US$111,111. In the highest category of revenues there are 45% of all multinational companies and 42% of all local companies had turnover of more than US$1.1 m annually.

IT investments

This section will present IT environment within the following topics: General IT investment, IT related expenditures, and reasons toward investing on IT.

General IT investment

The amount of company funds spent on IT investment has always been controversial. For many years it has been thought by some executives feel that too much has been spent and with insufficient return from this IT expenditure.

In terms of spending on IT, by looking at the current picture, most firms (83%) spend less than 10% of their overall expenditure on investments in IT. 16 % of the companies surveyed spend more than 10% on IT.

Budget on IT related aspects

With the scant budget for IT expenditure, the firms tend to spend it more on hardware and peripherals (98%). As more new IT products come out in more frequent cycles, the pressure to upgrade will only increase. Naturally, to operate the latest hardware and employ the necessary applications must be followed by an 88% budget in spending on Software.

However, the proportion of training and manpower costs is well below under hardware, software, and networks management costs.

Interestingly, with the emphasis on upgrading the systems, IT manpower and training takes up the fourth and fifth budget priority. There is a disparity on having the latest in hardware and software without the necessary adequate and/or trained personnel to operate it.

Reasons for Investing on IT

The motivation for investing in IT seems to be initially for proficient technical work, followed by management control and reporting, demand from employee (internal purposes). Innovation becomes least reason for investing on IT.

Strategic decision from company management 42% Desire to make administrative work more 33%

LEVEL OF IT USE IN BUSINESS PROCESS

In the next, level of IT use in business processes is going to be set. With so many potential strategic applications for IT in business, it becomes important to find a means of classifying the role played within organizations business processes. To enable such classification, a self-assessment matrix categorizing IT use into one of level or quadrants is often utilized. Construct IT – University of Salford develops the following matrix.

In this case, business processes have been defined as processes that cut through the entire organization to exist as a business entity. [Betts (1999)] outlines a definition of generic business processes in construction enterprises as shown below:

Business Planning: refers to strategic management of the organization, deciding on new business ventures, and other senior management functions.

Marketing: refers to market selection, public relation activities, market intelligence, and generating new business.

Information management: refers to communications links between parts and locations of the business and external organizations, information achieving and distribution, and activities in information processing. It also includes information strategy and system planning.

Procurement: refers to all activities associated with the involvement of the organization in the procurement activities of the client or customer and to the activities associated with procuring the services and activities of other participants to the organization’s input to the project. Finance: refers to activities associated with financial management and transaction processing on projects and at head office within organization

Client Management: refers to activities associated with managing relationships with customers, both on specific projects and in longer-term relationships.

Design: refers to those activities concerned with obtaining a brief, conducting feasibility studies, and sketch and detailed design activities undertaken on projects.

Construction: refers to those activities associated with production support on projects and extends into commissioning.

Occupation and maintenance: refers to activities associated with the use and occupancy, and maintenance phases of buildings and projects.

Human Resources: refers to activities within the organization and on its projects that concern the management of people.

The Porter’s Value chain models [Porter (1980)] can also to be adapted to the construction industry, where business processes divide into two categories:

Core activities: refers to processes associated with business planning include design, construction operations include planning & scheduling, Operation executions and client services follow-up include client management.

Supporting activities: refers to processes associated with human resources, procurement, finance, IT and other technology application and development, and marketing.

The following sequences describe the methodology adopted in assessing the level of IT use in different business processes in construction organizations.

Use questionnaire results related to three typical benefits gained in the previous section would to find out the role played within construction organizations. [Betts (1999)] provided a useful checklist of typical benefits in relation to business processes. Rank business processes and the classify into core activities and supporting activities Use the self-assessment matrix to assess the level of IT use.

Table 7 shows construction organizations in Indonesia use IT mostly in processes related to information management, occupation and maintenance management, and business planning. IT has made little difference in business human resources and marketing process. Overall, IT has been employed in core activities rather than supporting activities within business process. However, the level of usage is still very below. From this evidence, it may be concluded that Indonesian construction companies are not yet in the strategic position in the exploitation of IT. It can be said to be in planned level where the applications support business activities.

COMPARISON OF IT INVESTMENT IN INDONESIA WITH OTHER COUNTRY

Looking at IT use in Singapore construction industry [Technowledge, (2002)] that could be as best figures of recent pattern in developing country, in particular Asia. Other similar surveys that have been carried out in the past about information technology in the construction industry include the following:

A Survey on the impact of information technology on Canadian architecture, engineering and construction industry [Hugues Rivard (2000)

IT-Barometer (2000)]: The use of IT in the Nordic construction industry [ Olle Samuelson (2002)].

The barometer survey has been applied to a number of different countries over last five years. However, there is a limit to the extent of comparison that can be made between these different surveys, as there is a variation in both the questions asked and the classification of individuals and firms that supplied answers. Although a direct and exact comparison is not possible, the following general comments can be made in relation to the past and current use of information technology by the construction firms in Singapore, Canada and Nordic Countries:

The motivation for investing in IT stems first internally in Indonesia and Singapore (demand from employees), followed by demands from client and desire to make more administrative work. In contrast, firms in Canada and Nordic Countries, where desire to stay ahead of competition and make administrative works become leading motivations, and then followed by desire to make technical work more efficient.

CONCLUSION & RECOMMENDATION

Survey shows that Indonesian construction industry was having investment for acquiring the latest in hardware and software, but does not have adequate and trained personnel to utilize the same. It can be surmised that IT is used mostly in administration and other supporting area, but not in strategic core and business enhancement processes.

If above areas of IT applications are strengthened the Indonesian construction industry will reap greater benefits.

Since the level of IT use is prevalent at lower level, top management of construction organizations should have strong commitment to develop strategic management of IT in their business processes. The hardware, software and their applications should be utilized to enhance both core and supporting activities to gain competitive advantage in today highly global business environment. Secondly, the firm's management should give greater attention to IT support and training, by making sure that there is sufficient trained staff for the implementation of IT, and making greater effort in training staff on the correct and efficient use of IT in the organization. Thirdly, Government and public agencies should consider policies that encourage the use of IT in the construction industry thus making this industry sector more competitive, and encourage industry to make greater use of information system.

FURTHER WORKS

The survey was confined to only one sub-sector (large contractors) of the Indonesia construction sector in particular Jakarta. Other sub-sectors such as small and medium firms should be a part of future surveys. This being the first published survey of this type in Indonesia, a full study in greater breath and depth would be highly recommended for this important field. The result of such a study and the adoption of its recommendations would be of immense value to the construction industry in Indonesia and the national economy.

REFERENCES

Arif, A.A. & Karam, A.H. (2003) A Comparative Study: With Insight into The Use of IT in Local Architectural Practices. Proceeding W78-19, pp.8-14.

Betts, Martin (1999) Strategic Management of I.T. in Construction. Blackwell Science

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Intelligent decision support system

(2) There is a growing gap in managing IT, where high investment and expenditure in hardware and software on one hand with poor human resources development on other hand;

(3) From strategic point of view, Indonesian construction industry is still in reactive mode in managing IT indicating that the industry has a limited understanding of the value and potential of IT.

The paper suggests a need to aggressively promote relevant government initiatives which would increase strategic use and adoption of IT.

Government and public agencies should consider policies that encourage the use of IT in the construction industry thus making this industry sector more competitive.

The research aims to investigate the current state of IT in the construction industry, to obtain an up-to-date and general view of the state of IT applications in Indonesia.

Artificial intelligence (AI) has become a popular topic in the realm of business. From predicting IT failures to which new song will become a hit, AI presents many exciting opportunities. This begs the question: how is AI affecting the most critical element of any business — its strategy?

MIT Sloan Management Review recently partnered with The Boston Consulting Group to conduct research on how AI is currently being integrated into business strategy and how it might affect the business landscape going forward. The extensive research project generated a lengthy eight-part report titled Reshaping Business with Artificial Intelligence.

When it comes to AI, businesses think ambitiously. Nearly 85% of executives believe AI will allow their company to obtain or sustain a competitive advantage in the marketplace. Contrastingly, just one in five companies have incorporated AI into their organization and less than 39% of companies have an AI strategy.

As it stands now, businesses are rarely acting on their beliefs when it comes to AI. Executives appear to have grand ideas about how AI will help their business but very few have actually taken the steps to begin implementing it into their organizations. This can and likely will change at a rapid pace in the years to come as AI technology becomes more accessible. As it stands now, companies with over 100,000 employees are the most likely to be on top of their AI strategy.
Expectations

Only 14% of businesses believe that AI is currently having a large effect on their business, yet 63% expect to see the positive effects of AI implementation within just five years. Business leaders have high expectations of successfully implementing and improving their organization with AI in the very near future. But how valid are their expectations?

Vishal Sikka, former Chief Executive Officer and Managing Director of Infosys Ltd., is optimistic about AI but cautions against hyping it as an imminent triumph:

“If you look at the history of AI since its origin in 1956, it has been a story of peaks and valleys, and right now we are in a particularly exuberant time where everything looks like there is one magnificent peak in front of us.”

Are expectations based on hype or something deeper? What is driving the positive outlook from executives remains unclear. Most executives believe new business opportunities and reduced costs will come as a result of AI. These expectations are rather vague, however, and indicate that many businesses aren’t exactly sure how AI will help their organization yet.

Organizations report significant differences in their understanding of AI: 16% of respondents strongly agree that they understand the costs of developing AI-based products and services, while nearly the same percentage (17%) strongly disagree that their organization understands these costs. There is a clear knowledge disparity within organizations regarding what resources are required to adequately implement this type of technology. This needs to be addressed before AI can successfully be incorporated into critical organizational processes.
How Can AI Impact a Strategy?

In many ways, the lack of understanding when it comes to AI is due to the variety of ways AI can be implemented into a business. Different industries, or even different companies within the same industry, may use AI in different ways. When the way AI is used varies from company to company, it can be hard to wrap your head around how exactly it can help.

This excerpt from the report suitably illustrates the many disparities in AI usage:

The differences in adoption can be striking, particularly within the same industry. For example, Ping An, which employs 110 data scientists, has launched about 30 CEO-sponsored AI initiatives that support, in part, its vision “that technology will be the key driver to deliver top-line growth for the company in the years to come,” says the company’s chief innovation officer, Jonathan Larsen. Yet in sharp contrast, elsewhere in the insurance industry, other large companies’ AI initiatives are limited to “experimenting with chatbots,” as a senior executive at a large Western insurer describes his company’s AI program.

For many businesses, AI will help them nail down better internal processes. In an example shared in the report, Airbus wanted to increase the production rate of aircrafts. To accomplish this, Airbus needed to respond to disruptions in the factory as quickly as possible.

Airbus’ AI was able to combine data from past production programs, continuing input from the A350 aircraft program, fuzzy matching, and a self-learning algorithm to identify patterns in production problems. The data gave Airbus the power to solve a problem more quickly and efficiently than ever before. The report notes that BP, Infosys, Wells Fargo and Ping An Insurance have had similar positive experiences using AI.

Obviously, integrating AI won’t be as simple as the example suggests. There will be a massive learning curve for organizations before they’re able to start implementing AI effectively. Management will encounter a host of challenges, like organizing AI processes and rethinking their organization’s competition (who will be taking advantage of AI, too). And the public will have to trust that AI systems work before many organizations can start relying on them for consumer-facing operations. We still have a lot of ground to cover but current trends suggest the AI revolution may not be too far off.
Considering the Future

AI is showing that it will create value within industries but it’s not exactly clear which industries it will benefit the most. The report notes that the outcomes of AI implementation will likely be uneven in just about every industry interested in the technology. On the same note, if companies in the same industry all expect to gain a competitive advantage from AI, it is inevitable that there will be those that fail to gain an edge. Success will likely come down to which organizations can best grasp which processes in their company AI can help improve and understand which elements of their internal process AI can track. AI won’t miraculously solve problems for businesses on its own; every business is different and will require effective human rollout to have the ideal effects on any organization.

As the report explains: “For AI to become a prominent feature in future strategies, companies must figure out how humans and computers can build off each other’s strengths to create competitive advantage. This is not easy: Companies need privileged access to data — which, as we’ve seen, many do not now have. They must learn how to make people and machines work effectively together — a capability relatively few Pioneers have at present. And they need to put in place flexible organizational structures, which means cultural changes for both company and employee.”

As it stands now, every organization needs to start considering AI and its implications. At this point, the longer your organization waits to create a plan the more behind you’ll be in your industry. If AI isn’t on your radar, it certainly is on your competitors’.

ВОЗМОЖНОСТИ И НАПРАВЛЕНИЯ ПРИМЕНЕНИЯ ИНТЕЛЛЕКТУАЛЬНЫХ ТЕХНОЛОГИЙ В СТРАТЕГИЧЕСКОМ УПРАВЛЕНИИ

Научный руководитель, доктор экономических наук, профессор – Никитаева А.Ю.

Южный Федеральный Университет, Россия, г. Ростов-на-Дону

Производительность отраслей тесно связана с качеством решений на стратегическом уровне. Однако возрастающая сложность внутренней и внешней среды промышленности и неструктурированный характер решений на стратегическом уровне делают решение очень сложной задачей. Количество влиятельных переменных настолько велико, и их последствия настолько разнообразны, что любая попытка их инкапсулировать рациональным образом может действительно препятствовать процессу принятия решений. С этой целью в этом исследовании рассматриваются преимущества инструментов поддержки принятия решений и преимущества этих инструментов для стратегического управления. Некоторые из этих инструментов детерминированы и структурированы. Однако решение неструктурированных проблем основывалось на эвристических подходах и суждениях лица, принимающего решения. В то время как детерминированные проблемы в значительной степени были рассмотрены, и для них были разработаны соответствующие модели и алгоритмы, неструктурированные проблемы остались относительно без внимания, и исследования в этой области сосредоточены на отдельных проблемах. С этой целью исследование подчеркивает актуальность и потенциальное использование искусственных интеллектуальных методов в оказании помощи менеджерам с неструктурированными решениями. Кроме того, утверждается, что система поддержки принятия стратегических решений должна принимать интегрированную структуру, так как многие узлы решений в рамках общей структуры принятия решений имеют общие атрибуты, а взаимосвязь между этими узлами решения имеет сложную структуру.

Ключевые слова: Принятие решений, стратегическое планирование, реализация стратегии, факторы окружающей среды, Интеллектуальная система поддержки принятия решений

Корпоративная политика и принятие решений имеют жизненно важное значение для успеха бизнеса и повышения эффективности. Принятие решений на высшем уровне должно учитывать степень динамических изменений, связанных с процессом, развитием технологий и влиянием таких бизнес-факторов, как глобализация. Объем правильных решений, основанных на опыте и проницательности людей, был деградирован сложностью бизнес-среды и динамикой изменений. Поэтому необходимо принять более надежный подход к принятию решений, когда больше факторов и обстоятельств можно рассматривать в свете того, что уже известно из множества источников, включая сохраненные корпоративные знания о бизнесе.

В настоящем документе признается сложность принятия решений на всех уровнях управления организациями и что принятие каждого решения зависит от вклада от различных других решений на разных уровнях. С этой целью в документе предлагается структура, отражающая взаимосвязи и взаимозависимости решений на стратегическом, тактическом и операционном уровнях, а также учет межорганизационных переменных и внешних факторов, влияющих на организацию.

Предлагаемая система поддержки принятия решений, которая для данной ситуации помогает руководству на исполнительном уровне принимать более эффективные стратегические решения. Результаты работы могут быть использованы корпоративными менеджерами для повышения их способностей, а не для замены их суждения. Поэтому это будет инструментом для лиц, принимающих решения, для повышения качества своих решений, дополняя их интеллект. Поскольку корпоративные решения основаны на информации и решениях с других уровней организации, конечный продукт также будет инструментом поддержки принятия решений для управления на других уровнях.

Процесс разработки включает в себя определение совокупности структуры управленческих решений на уровне предприятия, как показано на рисунке 2. Это также требует идентификации и определения всех узлов (объектов) решения на стратегическом, среднесрочном и операционном уровнях. Построение общей модели системы поддержки исполнительной информации потребует разработки отдельных объектных моделей.

Исследование проводится в два этапа более или менее последовательным образом. Первый этап заключается в разработке структуры управления и создании связанной структуры принятия решений. Для каждого типа решения будут определены соответствующие инструменты принятия решений. Первая фаза является результатом брака двух отдельных исследований, которые проводятся параллельно. Первоначально, как и в традиционной иерархической структуре, определяются решения на исполнительном уровне. После того как будет создана основа принятия решений и определены инструменты поддержки, этап 2 начнется с разработки систем, лежащих в основе базы данных. В идеальном случае предлагаемая база данных будет расширяться, чтобы охватить все аспекты принятия управленческих решений. Однако интегрированные базы данных лучше всего подходят для определенных сред, таких как проекты (см. Tanyer and Aouad 2004). Принимая во внимание, что для предмета этого исследования, ввиду разнообразия узлов решения, необходимо, чтобы структура была гибкой, чтобы обеспечить входные данные от распределенных объектов.

Методы поддержки принятия AI будут играть центральную роль в манипулировании данными, относящимися к природе узлов решений, и формированию разумных решений и решений. Поскольку база данных генерирует новые знания, будет достигнуто постоянное улучшение, что приведет к большей эффективности и уменьшению количества отходов.

Производительность многих организаций и промышленности была ограничена качеством решений руководства. Признавая важность принятия решений на стратегическом уровне и его существенное влияние на эффективность организации, в документе обсуждается структура системы управленческих решений и предлагается, чтобы объектно-ориентированный подход к анализу и моделированию дают необходимую гибкость, необходимую для такой сложной проблемы.

Несмотря на то, что многие решения оформляются на основе использования детерминированных и других установленных методов, что, несомненно, связано с характером решений на стратегическом уровне, использование AI рассматривается как императив и потенциальные возможности были выделены ряд методов.

Number of	1-10	11-50	51-100	101-200	>200
Employees
Percentage	2.1%	29.2%	12.5%	18.8%	37.5%

Annual Revenue	<US$0.1M	US$0.1-0.6M	US$0.6-1.1M	>US$1.1M
Percentage	12.5%	25.0%	18.8%	43.8%

Budget/Costs	Hardware	Software	Network	Training	Manpower	Others
Percentage	98% 88%		50% 40% 29%			6%

Demand for management control and reporting	67%
Demand from employees	60%
Desire to stay ahead of competition	58%
Demands from clients/customers	50%

IT Level	Characteristics
5 Integrated	IT plays a vital role in your business activities and is integrated with your clients and business partners IT systems
4 Strategic	Your business employs IT as part of overall business strategy. IT used to analyse and improve business activities
3 Planned	Your business has a program for IT investment and implementation. The application support business activities and tend to be working satisfactorily
2 Responsive	Competitors or software vendors govern IT implementation. IT is used primarily when asked by clients and partners
1 Occasional	Your business has limited understanding of value and potential of IT. It is dependent on individuals buying hardware and software for their own needs
0 Not Used	Your business does not use IT to support its activities

Possibilities and directions of application of intellectual technologies in strategic management

key:

Что такое интеллектуальные технологии?

Определение интеллектуальных технологий

Преимущества интеллектуальных технологий

Продукты и услуги HPE категории интеллектуальных технологий